What is open-source software and why is it valuable to businesses?

Open-source software is computer code that's freely available for anyone to use, modify, and distribute. It's valuable to businesses because it's developed collaboratively by global communities, often resulting in robust, well-tested tools without licensing costs. Companies in this stock group build business models by offering enterprise-ready versions with added security, support, and features that businesses are willing to pay for.

How do these companies make money if the core technology is free?

These companies generate revenue through several channels despite the core technology being free. They typically offer premium features not available in the free version, professional technical support, managed cloud hosting services, and enterprise-grade security enhancements. They also provide training, consulting, and implementation services. This "freemium" model allows them to benefit from widespread adoption while monetizing through value-added services.

What is a NoSQL database like MongoDB?

A NoSQL database like MongoDB is a type of database that doesn't use the traditional table-based structure of relational databases. Instead, MongoDB stores data in flexible, JSON-like documents where fields can vary from document to document. This makes it particularly useful for handling large volumes of unstructured data, rapid development, and scaling across multiple servers. Companies like MDB commercialize this technology by offering managed cloud versions with additional security and functionality.

What are DevOps tools and why are they important?

DevOps tools are software applications that help development and operations teams collaborate more effectively throughout the software development lifecycle. They automate processes like code integration, testing, and deployment, making software development faster and more reliable. Companies like GitLab (GTLB) and JFrog (FROG) build their businesses around these tools because they're essential for modern software development, especially as businesses accelerate their digital transformation efforts.

What is cloud-native architecture and why does it benefit these companies?

Cloud-native architecture refers to designing applications specifically to take advantage of cloud computing environments. These applications are built as microservices (small, independent components) that run in containers (lightweight, standalone packages) and are orchestrated by tools like Kubernetes. This approach allows for greater flexibility and scalability. Companies in this stock group benefit because enterprises need their expertise to implement, manage, and secure these complex cloud-native systems, creating ongoing revenue opportunities.

15 handpicked stocks

Open-Source Champions

These innovative companies turn free open-source software into thriving businesses. Carefully selected by our analysts, these stocks represent firms that have built powerful commercial models around community-developed technologies while serving as gateways to global innovation.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17